28 April 2022, Thursday, 10:22 329

NBU Buys War Bonds For Another UAH 10 Billion

Editor: Roman Vaniyan

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The National Bank has bought war bonds for extra UAH 10 billion.

The NBU has said this in a statement, Ukrainian News Agency reports.

Since the beginning of April, the NBU has bought war government bonds for UAH 50 billion: on April 12 and 20 - UAH 20 billion each and on April 27 - UAH 10 billion.

The portfolio of military bonds owned by the NBU will be UAH 70 billion as of April 28.

This increase in funding compared to March is associated with an increase in budget requirements, given the tax changes introduced and lower international funding.

The fall in economic activity as a result of hostilities significantly limited budget revenues.

Unlike March, budget revenues did not support the early payment of taxes by businesses and the transfer of dividends by state-owned companies.

The position of the NBU on the financing of the state budget is unchanged - the support of the NBU cannot be the main source of financing the government's expenses.

Given this, it is necessary to activate market attraction through the placement of government bonds by the Ministry of Finance, including at the expense of the banking system.

This minimizes the need for emission financing from the NBU, which will reduce the risks for macro-financial stability and avoid loss of confidence in the central bank.

The NBU is further striving for the earliest complete refusal to finance the state budget deficit.

This will happen when the risks of unbalancing the situation in the fiscal sector become minimal.

As Ukrainian News Agency reported, on March 1, the Ministry of Finance placed war bonds for UAH 8.1 billion, on March 8 - for UAH 6.7 billion, on March 15 - for UAH 5.1 billion and USD 12 million, and on March 22 - for UAH 6 billion , March 29 - for UAH 3.3 billion, April 5 - for UAH 5.6 billion, April 12 - for UAH 6.2 billion, April 19 - for UAH 157 million, USD 82 million and EUR 33 million, April 26 - for UAH 13 billion.

The Cabinet of Ministers intends to gradually issue military bonds up to UAH 400 billion.

President Volodymyr Zelenskyy recommends that the NBU buy war bonds.

On March 8, the NBU bought UAH 20 billion worth of war bonds and, if necessary, will continue to finance critical government spending under martial law.